Australian Co-operative Foods Limited and Secretary, Department of Agriculture Fisheries and Forestry

[2004] AATA 1314

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1314

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2002/1322

GENERAL ADMINISTRATIVE DIVISION		)
Re		AUSTRALIAN CO-OPERATIVE FOODS LIMITED

Applicant

And SECRETARY, DEPARTMENT OF AGRICULTURE FISHERIES AND FORESTRY

Respondent

DECISION

Tribunal The Hon R N J Purvis Q.C., Deputy President

Date10 December 2004

PlaceSydney

Decision The decision under review is affirmed.

[Sgd] R N J Purvis Q.C.
  Deputy President

CATCHWORDS

Dairy Adjustment Levy – leviable milk product –jurisdiction of Tribunal to determine whether leviable milk product -  distinction between beverage and food – yoghurt and yoghurt drinks – Yogurt to Go a beverage – marketed principally as beverage and used primarily as such.

Dairy Produce Act 1986
Dairy Adjustment Levy (General) Act 2000 (Cth);

Dairy Adjustment Levy Collection Regulations 2000 (Cth)

Bristol-Myers Company Pty Ltd v Commissioner of Taxation (1990) 23 FCR 126

REASONS FOR DECISION

10 December 2004               The Hon R N J Purvis Q.C., Deputy President   

the application

1.      On 12 August 2002 the Secretary, Department of Agriculture Fisheries and Forestry (“the Respondent”) wrote a letter to the Group Secretary of Dairy Farmers;  the latter being a name under which Australian Co-Operative Foods Limited (‘the Applicant”) carries on its business. The letter reads as follows (T10 p23):

“Your request of my review of Dairy Farmers’ “Yoghurt to Go” as a leviable milk product for the purposes of the Dairy Adjustment Levy was received on 1 July 2002.

Exemptions to the application of the Dairy Adjustment Levy can only be made through an amendment to legislation. I am unable to review this issue via Regulation 19 of the Dairy Adjustment Levy Collection Regulations 2000 (the regulations) as it does not provide for the review of a product’s status as a leviable milk product.

You also requested a review of the decision made under the provisions of Regulation 17 of the regulations in respect of refunding levy paid on “Yoghurt to Go”.

The review was conducted under the provisions of regulation 19 and, in accordance with sub regulation 19(3) I have made a decision.

My decision is to confirm the original decision not to agree to the refund.

My reasons for this decision are that the payment of levy was made in relation to a product, “Yoghurt to Go”, which has not been exempted by the regulations and continues to be subject to the Dairy Adjustment Levy. Therefore the request to refund the levy does not satisfy the criteria set out in Regulation 17.”

2.      On 10 September 2002 the Applicant applied for review by this Tribunal of the Respondent’s decision and set forth its reasons (T1 p4):

“The applicant seeks a review of the decision of the Secretary which:

(a) Incorrectly decided that a levy paid by the applicant pursuant to the Dairy Adjustment Levy (General Act) 2000 and the Dairy Adjustment Levy Collection Regulations 2000 (“the Regulations”) should not be refunded pursuant to clause 17 of the Regulations;

(b) Incorrectly failed to consider whether or not the applicant’s product “Yoghurt to Go” is a “beverage” within the meaning ascribed to that term pursuant to clause 88 of Part 4 of Schedule 2 to the Dairy Produce Act, 1986 (“the Act”);

(c) failed properly to apply the terms of clauses 17 and 19 of the Regulations in deciding that the applicant’s payment of the levy could not be refunded until an amendment has been made to the legislation applicable to the payment of a levy.”

3.      Recognising that the Dairy Produce Act 1986 (“the Act”) did not provide a “mechanism for the Applicant” to appeal the Respondent’s determination until the levy had been paid on the relevant product, payment of the levy has been made under protest.  In its letter of 22 May 2002 the Applicant applied “under Regulation 17 of Dairy Adjustment Levy Collection Regulations 2000…for...refund of the full amount so paid and further reserves all rights to challenge the right of [the Respondent] to apply the Dairy Adjustment Levy to Yoghurt to Go related transactions”.

4.      In its reply to the letter of 22 May 2002 the Respondent by letter of 30 May 2002, inter alia stated with reference to Regulation 17 (T7 p19):

“…

This regulation provides for a refund of Dairy Adjustment Levy and specifies that the Secretary may refund an amount of levy if satisfied that one of three specific circumstances exists.  I presume that you rely on 17(3) (a) which reads:

“(a) the amount of levy was paid or remitted in respect of a product which was subsequently determines not to be subject to the levy; or”

As the product in question has been determined to be subject to the levy, this provision does not apply. The notes to that Regulation emphasise by example its application. Consequently, there is no provision for the Secretary to consider this application under Regulation 17(3) (a) of the Dairy Adjustment Levy Collection Regulations 2000.”

5.      However, on 24 June 2002, the Applicant wrote to the Respondent stating (T8, p20):

“…

It appears that there has been some misunderstanding as to the nature of Dairy Farmers’ request for review of AFFA’s decision.

…Dairy Farmers is challenging the decision by AFFA’s Levies Revenue Service that Yoghurt To Go is a leviable milk product within the terms of part 4 of Schedule 2 of the Dairy Produce Act, 1968 (Cth).

My letter of 22 May 2002 was a request for administrative review of that decision by the Secretary pursuant to Regulation 19(1) (b) of the Collection Regulations.

I invite you to ask the Secretary to consider the matters raised in my letter of 22 May 2002 and its enclosures pursuant to Regulation 19(1) (b) of the Collections Regulations…”

6.      It was in response to the Applicant’s letter of 24 June 2002 that the decision letter of 12 August 2002 was written.

issues for decision

7.      Consistent with the matters raised in the correspondence passing between the parties, the issues for determination by the Tribunal in the subject application are whether:

·the Tribunal has jurisdiction to determine whether “Yoghurt to Go” is a leviable milk product as defined in clause 88 of Schedule 2 to the Act;

·the Applicant’s product, which is marketed as “Yoghurt to Go”, is a leviable milk product within clause 88 of Part 4 of Schedule 2 to the Act and section 4 of the Dairy Adjustment Levy (General) Act 2000 (Cth);

·the amount of levy paid by the Applicant in respect of “Yoghurt to Go” was paid in respect of a product which is not subject to the levy;

·the Applicant is entitled to a refund of levies paid (under protest) in respect of “Yoghurt to Go” pursuant to clause 123 of Part 4 of Schedule 2 to the Act and Regulation 17 of the Regulations.

the hearing

8.      At the hearing of the application the Applicant was represented by Mr Stephen Burley of Counsel and the Respondent by Mr R J H Darke of Senior Counsel with Mr G K J Rich of Counsel.

9. The documents lodged with the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were admitted into evidence and marked T1 to T12.  Documents tendered on behalf of the parties were also received in evidence and marked accordingly namely:

Exhibit No	Description	Date
A	Affidavit of Nicola Anne Wilkinson with annexure	2 June 2003
B	Affidavit of Emma Josephine Heasman with annexure	10 September 2004
C	Plannogram of the type referred to in para 13 of Ms Heasman’s affidavit
D	Affidavit of Mr N A Reynolds	21 May 2003
E	Affidavit  of Mr N A Reynolds	2 September 2004
F	Document exhibited as NRAI in Exhibit D
G (confidentiality order)	Manufacturing Specifications for Ski D’Lite Low Fat Yoghurt, Ski D’Lite  Yoghurt to Go, Ski Divine Fruited and Flavoured Yoghurt, Ski Divine
H	Affidavit of Dr George Crank	29 May 2003
J	Affidavit of Paul Lindsay Blanket	10 September 2004
K	Four containers of Ski Yoghurt – empty
L	Full containers of Ski Yoghurt
1 (confidentiality order)	Business Plan Project Champagne/Schnapps
2	Report of Dr Margaret Craig-Lees	23 September 2003
3	Video referred to in footnote 4 of Dr Craig-Lees report
4	Photographs marked no 1 , 2, 3, 4, 5, 6 in Dr Craig-Lees report

10.     Oral evidence was given by Mr Norman Reynolds, General Manager of the Applicant, Dr George Crank, one time Professor of Chemistry and currently a consultant in Chemistry and Toxicology, Mr Paul Blanket, Marketing Consultant and a lecturer in advertising and marketing at the Macquarie Graduate School of Management and Dr Margaret Craig-Lees, Senior Lecturer in Marketing at the University of New South Wales, upon which they were each cross-examined.

relevant legislation and regulations

11.     As far as it is relevant to a determination of the issues raised by the parties, the legislation and regulations are

Dairy Produce Act1986 Schedule 2, Part 4:

“…

88 Definitions

…

dairy product means:

(a) milk; or

(b) any other product made from, or containing, milk or a constituent part of milk.

…

leviable milk product means a dairy product that is:

(a) marketed principally as:

(i) a beverage for human consumption; or

(ii) an ingredient for use in making a beverage for human consumption; or

(b) for use principally as”

(i) a beverage for human consumption; or

(ii) an ingredient for use in making a beverage for human consumption;

but does not include a product declared by the regulations to be exempt from levy.

…

89 when levy is payable

(1) Levy is payable on each of the following:

(a) the sale of a leviable milk product to a person who purchases for the purposes  of resale in Australia, where the resale is a retail sale;

(b) the retail sale of a leviable milk product;

(c) the sale of a leviable milk product to a person who purchases for the purpose of relevantly applying the product to the person’s own use in Australia;

(d) the relevant application to a person’s own use of a leviable milk product.

…

92 Exemptions from levy

The regulations may make provision for exemptions from levy.

…

124 Refund of overpayments

If any of the following amounts has been overpaid, the amount overpaid must be refunded by the Commonwealth:

(a)  an amount of levy;

(b)  an amount of late payment penalty.

125 Refund of levy

The Regulations may make provision for refunds of levy.”

Dairy Adjustment Levy Collection Regulations 2000 (“the Regulations”)

“5 Exemption from levy

For clause 92, a dairy product is exempt from levy if, at the time when the levy would be imposed under clause 89, the product is:

(a)  a milk product containing 12 % or more milkfat; or

(b)  a milk powder; or

(c)  a milk concentrate, including a condensed or evaporated milk product.

…

17 When may a refund of levy be made

(1) A person may apply to the Secretary for a refund of levy.

…

(3) For clause 125, the Secretary may refund an amount of levy to a levy-payer or to an intermediary if the Secretary is satisfied that:

(a) the amount of levy was paid or remitted in respect of a product which was subsequently determines not to be subject to the levy; or

…

Examples for paragraph (a)

·If levy was paid on a product that is subsequently exported; or

·If levy is inadvertently applied to an exempt product.

…

(4) If the Secretary refuses to make a refund of levy, the Secretary must give the applicant written notice of:

(a)the refusal; and

(b)the reasons for the refusal.

…

19 Administrative review

(1) A person may apply to the Secretary for review of a decision (the original decision):

…

(b) made by a delegate of the Secretary to refuse to make a refund of levy under subregulation 17 (3).

…

(3) The Secretary must, within 45 days after receiving an application under subregulation (1), reconsider the original decision and must make a decision:

(a) in substitution for the original decision, whether in the same terms as the original decision or not; or

(b) revoking the original decision; or

(c) confirming the original decision.

…

(5) A person may apply to the Administrative Appeals Tribunal for review of a decision of the Secretary:

…

(b) to refuse to make a refund of levy under subregulation 17 (3); or

(c) in substitution for, revoking or confirming an original decision under subregulation (3)

…”

jurisdiction

12. It is true, as the Respondent reminds us, that the Tribunal has power to review an administrative decision only where an enactment provides that an application may be made for such review. The latter clearly implies that there is to be an identifiable decision capable of being considered and affirmed, varied or set aside. Thus, in the present instance, if the Act and the Regulations do not confer power upon the Tribunal to entertain a review of a decision then the Tribunal does not have the jurisdiction to do so.

13.     Jurisdiction is conferred upon the Tribunal by Regulation 19 (5) which, so far as here relevant, enables the Tribunal to review a decision of the Respondent to refuse to make a refund of levy under subregulation 17 (3) or in substitution for revoking or confirming an original decision under subregulation 19 (3).

14.     It is said, on behalf of the Respondent, that the decision stated in the Respondent’s letter of 12 August 2002 was made pursuant to the power given to him by subregulation 19 (3).  The letter does say so and specifies that “the payment of levy was made in relation to” Yoghurt to Go which “… continues to be subject to the Dairy Adjustment Levy and that the request to refund the levy does not satisfy the criteria set out in Regulation 17”.  The Respondent refused to make a refund under subregulation 19 (5) (b) and confirmed the original decision (19 (5) (c)).

15.     Subregulation 17 (3) enables the Respondent to refund an amount of levy to a levy payer or an intermediary, as is the Applicant, where as here relevant, the Respondent is satisfied that the levy was paid in respect of a product, here “Yoghurt to Go”, which was subsequently determined “not to be subject to a levy”.  The Applicant maintains that “Yoghurt to Go” is not a leviable milk product and accordingly a levy is not payable.  It asks for a determination to be so made and to the effect that the product is not subject to the levy and hence, within the meaning of subregulation 17 (3) (a), is entitled to a refund.

16.     The Respondent maintains that subregulation 17 (3) does not give him power to decide whether “Yoghurt to Go” is or is not a leviable milk product.  The reference to the Respondent being “satisfied” that the levy was paid on a product that “was subsequently determined”  not to be leviable is said to refer to satisfying “the Secretary that such a determination was made after the levy was paid but prior to the Secretary’s decision whether to make a refund”.  The use of the word “was” rather than “is” is said to raise an inconsistency with the notion that the question of leviability may or must be decided by the Respondent.  The Respondent is not empowered, it is said, to make a determination.

17. The payment of levy is obligatory. Indeed the Respondent accepted the payment of levy under protest. At the time of payment no determination had been made other than by dint of the statutory obligation to pay (Schedule 2, Part 4, Division 6). The Applicant says that “Yoghurt to Go” is not a leviable milk product.   It asked for and now on appeal asks for a determination to be made to this effect.  This all subsequent to the obligatory payment of the levy.  I see no reason why the Respondent should not make, or statutory provision against the Respondent making, the determination.  The Respondent is empowered to refund the levy consequent upon a determination being made.  It is implicit in such a determination being made that the issue of liability or otherwise to this payment of a levy be also decided.  The one will be clearly dependent on the other.  They are both a part of the same decision making process.

18.     It is said by the Respondent that the examples given in relation to subregulation 17 (3) are examples “of factual situations that may underlie a subsequent determination”.  They involve a change of circumstances subsequent to payment.  It is not in the subject instance, as was suggested by the Respondent, a deliberate decision to make payment in circumstances where liability for payment was disputed.  Payment was required by the legislation to be made before a review application could be made.  In the examples, the determination as to no liability for levy payment was made subsequent to payment, as might well be the case with regard to “Yoghurt to Go”.  It may be that payment of the levy is required by the legislation (see clauses 88 and 89) and without an administrative decision.  However, the entitlement to a refund is an administrative act vested in the Respondent implicit in which is a determination as to the existence of the pre-requisite to an entitlement to such a refund.

19.     The question as to whether the levy may be payable in relation to “Yoghurt to Go”  does involve, in the decision making process, a question of statutory construction as to the meaning to be ascribed to the words in the statute and then a factual decision as to whether the product comes within such meaning.   This is a question that falls for resolution upon a decision-maker when subregulation 17 is invoked.

20.     I am satisfied that the statutory powers earlier detailed in these reasons do include the power to determine whether the product “Yoghurt to Go” is a leviable milk product.  I am further satisfied that the decision of the Secretary contained in the letter 12 August 2002 was a decision made by the Respondent as to the product being subject to the levy, namely that it “continues to be subject to the Dairy Adjustment levy”.

leviable milk product – a beverage

21.     The Applicant maintains that “Yoghurt to Go” is not a leviable milk product in that it is not a beverage and that it is not marketed or used principally as a beverage for human consumption or an ingredient thereof.

22.     As has been earlier indicated the Tribunal is required to give meaning to the words used in the statute more particularly to the use of the word “beverage” in clause 88 and then make findings as to whether the product “Yoghurt to Go” is so marketed or used.  There is not an issue as to the product being a dairy product and that it is not an exempt product.

23.     The Respondent maintains that the product is both marketed and used principally as a “beverage for human consumption” and hence a leviable milk product.  It is, however, only necessary for the product to be either so marketed or so used as a beverage for human consumption. The product is clearly for human consumption.  But the question is whether it is marketed or used principally as a beverage.

24.     The Macquarie Dictionary defines beverage simply as “a drink of any kind”, and “drink” as relevantly “to swallow water or other liquid; imbibe... to take in (a liquid) in any manner; absorb…to take in through the senses, esp. with eagerness and pleasure…to swallow the contents of (a cup etc)…any liquid which is swallowed to quench thirst, for nourishment etc; a beverage”.  On the other hand “food”  is defined as “what is eaten or taken into the body for nourishment …more or less solid nourishment (as opposed to drink)…a particular kind of solid nourishment”.  The Shorter Oxford English Dictionary similarly defines “beverage” as a drink. 

25.     Consideration of the meaning to be given to words similar to those relevant to the present application, although such words were contained in a different statute, was given by Lockhart J in Bristol-Myers Company Pty Ltd v Commissioner of Taxation (1990) 23 FCR 126 where at 129 it was said that the expressions “food” and “beverage” “are ordinary English words and should be interpreted …according to the ordinary English usage”, being “the colloquial and literary English of the present day” (Shorter English Dictionary).

26.     In his reasons for decision in Bristol-Myers (supra) and at page 130 Lockhart J, adopting the Macquarie Dictionary definition of beverage, stating that the word means “any liquid that is swallowed to quench thirst or for nourishment”.  His Honour used the word “or” although that word does not appear in the dictionary definition itself. It does, however, with respect seem appropriate.  The dictionary uses a comma.  Thus a drink, whilst clearly a liquid, may be swallowed to quench a thirst or for nourishment.

27.     In discussing the nature and distinguishing features  of a beverage, a drink of any kind, it was stated in the Bristol-Myers (supra) at page 130:

“A beverage is consumed either hot or cold and is normally taken to quench the person’s thirst or for stimulation or as an accompaniment to solid foods either at meal times or between meals.  Beverages may contain stimulants such as caffeine and they may be used for refreshment or to overcome thirst. Beverages are not generally formulated to provide nor do they invariably provide essential nutrients to the meals with which they are consumed. An important part of a beverage is to replenish fluids.  It is an important element in the concept of a beverage that it is something one drinks not eats.  This is quite a usual means of distinguishing beverage from other types of liquid foods which are not beverages such as gravy, sauce and syrup.”

28.     As it was said in Bristol-Myers (supra) at page 131, so it is in the present application; Clause 88 describes the product which answers the description of “beverage” by reference to whether it is of a kind principally marketed or used for human consumption:

“Although this description does not specifically identify goods with reference to their own inherent qualities or characteristics, as distinct from their method of sale or marketing, it is obviously relevant to pay regard to the constituent qualities or ingredients of the goods themselves as well as how the goods are sold or marketed or put up for sale.”  

29.     Thus it is necessary, in the present application, to pay regard to the constituent qualities or ingredients of “Yoghurt to Go” as well as considering how it used or marketed.

30.     “Yoghurt to Go” is a Ski brand product.  It is one of a number of products that are recognised, established and marketed under that name.

31.     Whilst it is true to say, as did Dr Craig-Lees and Mr Blanket, that the “Yoghurt to Go” products are “brand extensions” of the earlier brand products and that there is a trading on the core brand, this does not align the recently introduced “Yoghurt to Go” with the earlier and still marketed and used products.  A distinction is clearly drawn in the manufacturing process and ingredients as well the perceived use.  Whilst some of the ingredients found in the earlier products may be found in the “Yoghurt to Go” product, the latter has a different composition and a different presentation and image all directed to its appealing to a different market use, namely convenience, mobility and no need to stop to swallow.  It is said that the tub product and the “to go” product are the same.  But this is not so, as the reduction in viscosity is achieved by reducing the protein content and eliminating the gelatine.  They may be the same as to other ingredients but the “to go” product is also distinctive in its consistency, its viscosity, its packaging and its advertised use.   It was said that the difference is as with white milk and flavoured milk.  But this is also not so.  The taste of the milk is quite different.  The taste of the yoghurts may be the same or similar but their nature, consistency and purpose of the particular presentation is quite different.  As with the milk, they are each designed so that they can be, inter alia, drunk.  That is not so with the yoghurt products.  The one is so designed, the other is not.  The “Yoghurt to Go” product is poured into the mouth; there is no need for any implement in aid of its ingestion.  It does not need to be munched.  The Applicant intends that the product be recognised by consumers as a drink.

32.     I am of the opinion that “Yoghurt to Go” is a beverage.  It may be consumed as a supplement to or for a meal but it is consumed as a nourishing drink.  It is a beverage, a drink that is also designed as a food that can be drunk.

33.     Dr Craig-Lees spoke of “Yoghurt to Go” not being advertised as yoghurt.  The key message, she said, is that the product is a convenient way to consume a yoghurt product.  But it is not the same yoghurt, “it is a convenient way of consuming a product form”.  In the course of her evidence, Dr Craig-Lees acknowledged that the shape of the container suggests the type of product in it, namely a substance to be drunk.  It is true, as Mr Reynolds said that “Yoghurt to Go” is by its brand name identified with other yoghurt products.  But as Dr Craig-Lees stated, the primary difference is in the product itself.  The brand name extends the brand not the product.  The product is a drinking yoghurt.  However, a clear distinction is drawn with the emphasis placed on its manner of use and consumption.  Mr Reynolds conceded during his cross-examination that “Yoghurt to Go” is a product designed to be drunk direct from a container.

34.     I agree with the Respondent’s submission to the effect that a beverage does not cease to be so because its viscosity is different, it is manufactured in a different manner or it is classified separately.  Whilst there may be a commonality in many of the ingredients of the tub and the “to Go” product, the most distinguishing feature of the latter is that it is a drink.

35.     I am satisfied that in accord with common usage, the “to Go” product is one designed to be swallowed for nourishment, to be taken in through the senses with eagerness and pleasure.  It is not eaten as in munching, chewing, digesting.  It is not in any form a solid.  It is a beverage.

36.     It is said by the Applicant that “Yoghurt to Go” is marketed principally as a yoghurt, meaning thereby not as a beverage but as are other yoghurt products.  Marketing has the dictionary meaning of being the total process whereby goods are put on the market.  It is concerned with the way in which the vendor of a product chooses to advertise and display the product for sale.  Evidence was given by experts in marketing, Dr Craig-Lees and Mr Blanket, each of whom spoke of marketing tools in aid of determining how a product was marketed.  They spoke of the promoting of a product, its price structure, the manner of distribution and the features of the product itself. 

37.     There was tendered, as a confidential exhibit, the Applicant’s business plan devised at or about the time of the initial release of the “Yoghurt to Go” product.  Often throughout the plan, prepared with the concurrence amongst others of Mr Reynolds in his then capacity as General Manager Research and Development, the “Yoghurt to Go” product is described as a “drink”.  The proposition behind the plan is that “Yoghurt to Go” is “a more convenient way to consume yoghurt” and that elements of the convenience include that it is “a healthy snack/drink”, “quick and easy to have drink”, and “easy to drink”.  The plan is relevant to the present application in that it indicates an intention and belief held by the Applicant at the time as to the place “Yoghurt to Go” would occupy in the range of Ski products and the market it would seek to attract.  Whether the marketing strategy subsequently adopted and the use to which the product has been put bear out the plan’s intent and promotional purpose will be seen from the other evidence.

38.     The “to Go” product is promoted by associating it with the conventional yoghurts, (which as already noted it is not) and then emphasising the convenience of it being able to be swallowed on the go.  It is identified as being a “snack”.  The word drink is not used.  There is, so says the Applicant, significance in the brand being used on the products.  Convenience of the form in which the product is presented is underscored; it being said, however, that such convenience does not transform “the Ski yoghurt from a food into a beverage”.  This contention, it seems to me, misses the essential difference between products.  It is not a matter of transforming the one into the other.  The process of production is different so far as the ingredients are concerned let alone the means of use.

39.     It is true that the product promotion refers to the Ski brand, much as one would expect, that name being long established in the yoghurt market.  But to say, as does the Applicant, that there is no suggestion that the “Yoghurt to Go” has no “different qualities in terms of taste, satisfaction or content” from a tub yoghurt is to belie the reality.  The product’s composition is different as is its consistency.  It is taste that might be similar.

40.     Promotion and distribution are seen in the positioning of the “Yoghurt to Go” with other yoghurt products in retail outlets.   Whilst it may well be that the placing of different products of the same brand nearby to each other would tend to minimise apparent differences or heighten alleged similarities, it will also enable the longer established product to pass off a brand to one more recently established.

41.     The container in which a product is sold may not dictate its nature.  However when seen in contrast to a product in a tub, it may well be concluded that it is intended to be consumed by drinking in contra distinction to placing it into a mouth by spoon and then eating  prior to digesting the substance.  If it is not intended to be drunk, placing it in a bottle would provide an inappropriate way of the product being consumed.

42.     I am satisfied as I have earlier said, that “Yoghurt to Go” is a beverage.  But the relevant issue is as to whether it is marketed or used principally as such.  It being a yoghurt that is drunk, a beverage, is not the same thing as saying that it is marketed as a beverage.  Dr Craig-Lees may have so contended in her affidavit evidence but I am not persuaded that this is so.  The true question is how the product is marketed and/or used, seen objectively.

43.     The objective facts are that “Yoghurt to Go” is sold in a bottle; there is a message of convenience; it can be drunk and can only be conveniently drunk from a bottle and it is a beverage.  It is marketed as a product “for busy people”; it is advertised as being able to be “eaten on the go”; it comes with a “resealable cap”; is “smooth” and does not require a spoon.  There is no other way if one is “on the go” and without a spoon to consume the contents of a “Yoghurt to Go” bottle other than by drinking. It is as Dr Craig-Lees testified “designed to be drunk”.

44.     But is “Yoghurt to Go” principally marketed or used as a beverage?  I am persuaded by the evidence that the “Yoghurt to Go” is principally, even be it not solely, marketed as a beverage.  It is certainly marketed as a Ski product, that is a yoghurt, but more it is promoted as a product that, whilst nutritious as is yoghurt, is to be drunk in order for it to be consumed, is of a much lower viscosity than yoghurt so that it is more easily so swallowed and digested the latter achieved by a difference in its composition.  The use of a bottle rather than a tub is a significant positioning of the product which is marketed primarily with the intent it be drunk, this as a matter of convenience.

45.     But more so it is principally used as a beverage.  Why, one may ask, buy “Yoghurt to Go” instead of yoghurt simpliciter?  The answer primarily is because it can be drunk, does not require a spoon or other implement for its consumption and can be used “on the go”, whilst moving or in motion.  The user does not have to interrupt other activities in order to obtain the benefits derived from its consumption.

46.     The product is primarily used in order to obtain the satisfaction derived from consuming yoghurt not in the conventional way by use of implements but by being drunk.  I do not see the product being used principally as is the established yoghurt.  The product is in the nature of a yoghurt but the use in its form is as a liquid that can be drunk.  The provision of nourishment is an element that is common to the bottled product and the tub product, but the method of consumption or use is different.  The use of the dairy product is different; it is used as a beverage.  The question is as to whether it is principally so used.  Whilst, as Dr Crank said in his evidence, a distinction can be drawn between the constituent elements contained in foods and beverages, as has been constantly maintained in this matter, the elements in “Yoghurt to Go” and yoghurt are not that dissimilar but for the absence of one and reduction in another element.  They are each intended to provide nourishment to the body.

47.     Consistent with the meaning earlier ascribed to the word beverage and “Yoghurt to Go” being found to be a beverage, it is not overly relevant to these reasons to discern the use to which the body, fluid wise, puts the beverage.  Even be this so the fluid content of “Yoghurt to Go” is considerably higher compared to the conventional yoghurt.

48.     I am satisfied that “Yoghurt to Go” is used principally as a beverage.

49. The Tribunal’s attention has been drawn to the explanatory memorandum that accompanied the introduction of the Act. The Tribunal is required to construe the Act and the wording used in it. I do not perceive any ambiguity in the wording of the relevant clauses of the Act and the Regulations. I do not experience any difficulty in applying to such words an appropriate common usage meaning. The “Yoghurt to Go” is a dairy product.  It comes in a liquid form.  It is a beverage.  It is a liquid milk product.  There is not an inconsistency that warrants further consideration of the explanatory memorandum.

decision

50.     The Tribunal is satisfied that “Yoghurt to Go” is a leviable milk product within the meaning of the relevant legislation.  “Yoghurt to Go” is a product which is subject to the levy.  The Applicant is not entitled to a refund of levies paid. The decision under review is affirmed.

I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon R N J Purvis Q.C., Deputy President

Signed:         A. Krilis  Associate

Date/s of Hearing  3 and 4 November 2004
Date of Decision  10 December 2004
Counsel for the Applicant         Mr S Burley
Solicitor for the Applicant          Mr S Pitcher
Counsel for the Respondent     Mr R J H Darke, Mr G K J Rich
Solicitor for the Respondent     Mr A Bradbury, Ms N Morris